Gold hits record on demand for currency alternative

Sebastian Derungs/AFP Getty ImagesThis file picture taken on April 6, 2009 shows gold bars stacked at the plant of gold refiner and producer Argor-Heraeus in Mendrisio, in the southern Swiss canton of Ticino. The price of gold struck an all-time high above 1,300 dollars an ounce on September 24, 2010 after the dollar weakened following poor US data. Gold hit a record 1,300.07 dollars an ounce at 1318 GMT on the London Bullion Market.

Gold climbed to a record in New York as the dollar extended its decline, boosting demand for precious metals as alternative assets. Silver advanced to a 30-year high.

Gold reached $1,333.80 an ounce as the dollar dropped as much as 0.7 percent against a basket of six currencies. Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. central bank may buy more debt to help the economy. The Bank of Japan today pledged to keep its benchmark interest rate at “virtually zero.” Since Sept. 14, gold has risen to a record 12 times.

“When governments are in the business of printing money, gold is going to do well,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “More quantitative easing is inevitable at this point for the U.S. The dollar is going to suffer, and gold is going to take out records along the way.”

Gold may reach $1,500 by the end of the year and $2,500 “in a year or so,” Peter Hambro, the chairman of Petropavlovsk Plc, Russia’s third-largest producer of the metal, said today in an interview with Bloomberg Television’s “Countdown.” Prices may climb to $2,000 within the next 10 years, Rogers Holdings Chairman Jim Rogers said yesterday in a CNBC interview. Rogers said he owns gold and silver and is “pessimistic” on the future value of the dollar.